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Chairman of the LVM Supervisory Board: the Nine-month Operating Results of JSC "Latvia's State Forests" Reflect the Company's Growth and Future Challenges

The Supervisory Board of JSC “Latvia's State Forests” (LVM) has evaluated the company's results in the first nine months of 2022. LVM's pre-tax profit reached 186.4 million euros, which is 87.7 million euros more as compared to the same period last year. This was mainly influenced by the 24.36 EUR/m3 or 47 % higher average sales price of roundwood assortment in the forest sector. 

Edmunds Belskis, Chairman of the LVM Supervisory Board: “The company has not only achieved high profit figures but has also been able to significantly increase the supply of energy wood chips to Latvian heat production companies. Also, the large volume of mineral materials supplied to road builders during the implementation of important state infrastructure facilities should be evaluated positively. However, a number of significant future  challenges are emerging – we increasingly feel the lack of high-quality logging service providers, especially in forest maintenance work, while the slowdown of the global economy will undoubtedly affect the wood market as well.”

During the reporting period, 4.86 million cubic metres of roundwood assortment were delivered to Latvian wood processing companies. In the nine months of this year, the company faced several challenges that affect the supply of wood volumes. The most important of them: the changing weather conditions in the first half of 2022 and the rapidly growing demand for logging and transport services from private forest owners, which has created a shortage in the market for these services.

Due to the lack of labour force, as well as the rapidly increasing price of fuel and other services, the amount of production costs of wood assortment in the nine months of this year is 18.3 million more than in the corresponding period last year. Some service providers have had difficulties in attracting forest machine operators this year, which had a significant impact on labour productivity indicators.

In the nine months of 2022, wood chips were sold in the amount of 468.8 thousand megawatt hours. As compared to the corresponding period of the previous year, we managed to supply our customers with 86.3 thousand megawatt-hours more volume.

In these nine months, LVM sold 1.13 million cubic metres of mineral materials and their mixtures, including 1.08 million cubic metres for external customers, which is 516.2 thousand cubic metres more than in the same period a year before. The materials offered by the company are used in road construction in Latvia, including one of the most ambitious construction projects at the moment – the construction of the Ķekava bypass.

The implementation of investment project “Establishment of Mežvidi Nursery” continues, and it will allow us to increase the number of tree seedlings grown in LVM tree nurseries, reaching 68.2 million seedlings by 2025.

To introduce the public to natural processes and to explain the increasing role of forestry in the national economy, this year the company has continued to implement LVM's environmental education programmes for school students and young people of various ages, as well as for teachers, and has organized educational hikes with the company's experts, inviting everyone who is interested to participate in them.

Latvian residents appreciate the opportunity to go out into nature to enjoy recreation in the fresh air. LVM maintains 295 free recreation sites equipped with picnic places with a table and benches, wooden footbridges, and observation towers, which improves the quality and accessibility of recreation for all interested parties. Visitors also appreciate the extensive recreation opportunities in the paid facilities maintained by LVM – Latvia's State Forests Nature Park in Tērvete was visited by a total of 136.4 thousand people by the end of September, and already on 20 October, the park welcomed its 150 000th visitor.